NRVs may hit earnings: $36.5 million earned through export of tobacco in Fiscal Year 2013

Pakistan earned $36.5 million through the export of tobacco during financial year 2012-13. This income may decline due to growing cultivation of Non-Recommended Varieties (NRVs), National Assembly Standing Committee on Commerce was informed Thursday.
"The cultivation of NRVs, which have poor chemical composition as compared to Recommended Varieties (RVs), badly affects tobacco export, causing loss to manufacturers and affecting farmers' health," said Azmat Hanif Orakzai during a presentation to the National Assembly Standing Committee on Commerce.
Azmat said for last five years, cultivation of NRVs - Swati, Spindandi, Qilladbti, - in Swabi, Mardan and Charsadda districts has become a serious problem for PTB. "NRVs have poor chemical composition of 1:2 nicotine and reduced sugar, while RVs have chemical composition of 1:6," he said.
He said despite serious efforts of PTB to persuade farmers not to cultivate NRVs, the problem has yet not subsided as 25 to 30 percent NRV cultivation has been projected in KP in forthcoming tobacco crop. MNA Siraj Muhammad Khan chairman of the committee presided over the meeting while MNA Chaudhry Asad-ur-Rehman, Shazia Mari, Musarrat Ahmad Zeb, Alhaj Shah Jee Gul Afridi, Sajida Begum, Sajjad Ahmad additional secretary ministry of commerce and other senior official also attended the meeting.
The committee asked PTB to make serious efforts towards improvement in quality of tobacco to make it less hazardous for health. The committee also directed the ministry of commerce to provide the list including name of new board director to the committee before sending it to the Prime Minister for approval. Siraj Muhammad said the committee will oversee the process regarding the appointment of board of directors and would like to see whether the people selected by the ministry of commerce meet the criteria or not.
Additional Secretary Sajjad Ahmad told the committee that the ministry has finalised the list of people selected for the appointment on the board of directors and would likely to share it with committee next week. Azmat said tobacco is cultivated over 0.27 percent of the total irrigated area. As many as 80,000 farmers are cultivating tobacco in the country. The 21 tobacco industries have employed 50,000 workers directly and more than one million indirectly, he added.
He said the tobacco industry contributed Rs 77 billion to the national exchequer under the head of Federal Excise Duty in 2012-13. Pakistan Tobacco Board (PTB), which is a semi-autonomous and self-sustaining organisation, was established on February 5, 1968 under the PTB Ordinance. The main function of PTB includes: to regulate, control, promote export and fix grading standards of tobacco. It also assists research and imparts training in tobacco testing as well as collecting statistics on different matters related to tobacco, he said.
He said PTB meets its budgetary expenses from the cess on tobacco produced in Pakistan and collected from tobacco companies under S.R.O.8(1) dated January 7, 1998 as well as from PTB investment. PTB received Rs 76,929,917 cess in 2010-11, Rs 77,718,394 in 2011-12 and Rs 85,002,221 in 2012-13, he said.
He said there are five types of tobacco including Flue Cured Virginia (FCV), Dark Air Cured (DAC), Light Air Cured (LAC), Light Sun Cured (LSC) and Semi Oriental or Whit Patta (WP). According to section 8 (1) of PTB Ordinance 1968, the federal government may, by notification, fix minimum prices below which tobacco of various grades shall not be bought or sold for consumption within Pakistan or for export and different prices may be fixed in respect of different areas, he said.
He said that PTB takes into account different factors while fixing minimum price of tobacco - increase in cost of production of tobacco and estimated quantity of inputs, minimum prices and weighted average prices of tobacco of the preceding year, world tobacco trends and rate of inflation. The minimum indicative price of different types of tobacco fixed for 2014 FCV plain area is Rs 159 per kg and FCV sub-mountain area Rs 175 per kg; Burely Rs 126 per kg, DAC Rs 76 per kg and WP Rs 83 per kg, he said.
The management of State Life Insurance Corporation of Pakistan also briefed the committee about its working. The committee asked the ministry of commerce to appoint State Life chairman. The committee directed launching a special scheme for protection of poor people and a health insurance scheme.